Sensex surges more than 1.5 pct; hits highest in over 1 month

MUMBAI (Reuters) - India's stock markets rose more than 1.5 percent on Monday, touching their highest level in over a month and heading for a fourth straight day of gains as expectations for a U.S. rate hike faded after weaker-than-expected U.S. jobs data.

Data on Friday showed U.S. non-farm payrolls rose by 142,000 in September, considerably lower than the 203,000 jobs the markets had expected. The report lowered expectations the U.S. Federal Reserve would cut interest rates this year.

Indian shares have gained for three consecutive sessions after the Reserve Bank of India (RBI) cut its repo rate by a bigger-than-expected 50 basis points last week, though traders say the extent of the rally could depend on upcoming earnings results.

Infosys Ltd is due to post its July-September results on Oct. 12, unofficially kicking off the earnings reporting season.

"We will see a marginal improvement (for earnings) in September quarter over June quarter but year-on-year that should be a 5-8 percent jump and this would be primarily driven by mid-sized companies," said G Chokkalingam, founder of Equinomics, a Mumbai-based research and fund advisory firm.

The 30-share BSE Sensex was trading 1.63 percent higher after touching an intraday high of 26,6652.89 points, its highest level since Aug. 28. The index rose as much as 1.64 percent.

The 50-share Nifty was up 1.59 percent after rising as much as 8077.55 points, also its highest intraday level since Aug. 28.

Almost all sectors were in the green except for select pharma stocks.

Financial stocks led the gains with most banks passing on the central bank's rate cut last week, to consumers.

Housing Development Finance Corp gained 4.6 percent and ICICI Bank rose 3.6 percent while HDFC Bank was up 2.3 percent.

Industrial stocks Larsen & Toubro rose 3.6 percent while BHEL gained 1.7 percent.

Meanwhile, bucking the trend, Maruti Suzuki fell 3.7 percent after brokerage Jefferies downgraded its rating to "underperform" from "buy" citing an expensive valuation.

(Reporting by Karen Rebelo in Mumbai; Editing by Sunil Nair)